It’s an uncomfortable truth for many that superannuation is not the sole source of retirement savings. In our original submission to the Senate Standing Committee on Economics Inquiry into the Superannuation (Objective) Bill 2016 we showed that many households have large non-super assets (not counting the family home). We demonstrated that many households are not saving only through superannuation for their retirement incomes, and so it is inappropriate to set a purpose for superannuation that it alone will provide an adequate, or ‘comfortable’ retirement income for all Australians.

Many in the superannuation industry found it hard to imagine that they might not be at the centre of the retirement universe. Industry Super Australia, in a briefing note provided to the Committee, accused us of ‘misleading’ analysis that committed ‘statistical sins’. Industry Super Australia claims that these ‘statistical sins’ lead us to overstate the importance of non-super savings, while not capturing the full diversity of household savings behaviour. But it is not our analysis that is misleading, as this supplementary submission to the Committee shows.

While we can debate the precise importance of non-super assets, and for whom, there is no way to deny that non-super savings are material for a significant number of Australians, even when excluding the family home and household effects. For many, superannuation will indeed be their dominant non-home asset, and the main contributor to a retirement income higher than the Age Pension. But for many others, non-super savings will make an important contribution to their retirement incomes.

Understanding how people really save for retirement matters. Given the differences in how households save, no policy will strike the optimal balance between working and retirement income for every household. The best that policymakers can hope for is a reasonable balance between the different situations of a diversity of households. To achieve this, any objective for superannuation must acknowledge the diversity of savings behaviour, and the substantial savings outside of super that exist to support the retirement of many Australian households.